Austrian Court Late in Deciding on Objection to Broad-gauge Railway

Vienna/Bratislava, December 17 (TASR) - The Austrian Federal Administrative Court in Vienna has now been dealing with an objection in the tender into feasibility of constructing a broad-gauge railway from Kosice to Vienna for four months, and it remains unclear when the final verdict should be expected, TASR learnt on Wednesday.

"We can't provide any comments on ongoing proceedings," reads a statement provided by the court to TASR.

The court received the objection on August 29. According to Article 326 of the Austrian Public Procurement Act, it should have decided within six weeks, TASR was told by Andreas Frohner, partner at Ernst & Young, which deals with investigations into corporate frauds and arbitrations. "I don't have any explanation why the court still hasn't decided," said Frohner.

Attorney Jana Martinkova from the Advocatus Martinkova law office also believes that the court should have decided within six weeks by either dropping the objection, or by deciding that the entire tender or at least part of it was invalid.

"It's possible to appeal against decisions made by the Federal Administrative Court at the Supreme Administrative Court, but ordinarily without a suspensory effect. So, even if the unsuccessful bidder appealed and the Supreme Administrative Court declared that the objection was justified, it would be a Pyrrhic victory for all. Breitspur Planungsgesellschaft as the tender announcer would be obliged to pay a compensation to the damaged bidder, and at the same time cooperate with a consortium that shouldn't have succeeded in the tender at all," she told TASR. The law office of Lansky, Ganzger & partner, which, according to TASR's information, represents Breitspur Planungsgesellschaft and Austrian rail company OBB, didn't want to comment on the matter either.

"Without having removed the obligation to keep secrecy from our customers in writing, we aren't able to answer these questions," reads the statement from Lansky, Ganzger & partner.

The tender hasn't been concluded due to an objection presented by unsuccessful consortium ILF-Werner Consult-Reming Consult. According to TASR's findings, the complaint concerns the presence of two companies owned by the same parent firm featured in two competing consortiums. More specifically, Valbek s.r.o. is part of the victorious consortium and at the same time a subsidiary of Valbek CZ. Both the latter company's website and the Trade Registry reveal that the company has ownership links with PRODEX, which was part of an unsuccessful consortium along with Schimetta and Stoik.

PRODEX on its website claims that it is a specialist in rail construction. Its managing director Lubomir Turinic told TASR that he is disappointed with the tender, but he doesn't expect to cooperate with the winner.

The tender has also been criticised by construction experts."It's strange that a consortium featuring Valbek s.r.o. was able to win [the tender]. According to my information, this company hasn't anything to do with rail construction and it hasn't prepared any rail construction project before," Dopravoprojekt general director Gabriel Koczkas told TASR.

The Bernard-Obermayer-Valbek consortium won the tender with a bid of less than €6 million. Unsuccessful bidders indicated that they were considering an appeal due what seemed to them to be an excessively low price and one very similar to another for a preliminary study drawn up by Roland Berger in 2011. The current document should be far more comprehensive, however.

The study was commissioned by Vienna-based company Breitspur Planungsgesellschaft, which is managed by Austrian, Ukrainian, Russian and Slovak rail companies. Slovak rail company Zeleznice Slovenskej Republiky (ZSR) has confirmed that the selection process is entirely in the hands of the Austrians. The tender had to conform with Austrian legislation and regulations, and the announcement concerning its organisation was published in the European Public Procurement Bulletin.

Slovak Transport, Construction and Regional Development Minister Jan Pociatek claims that the project should only bring positives for Slovakia. This strategic project would connect Asia and Europe via an alternative route to maritime transport.

The Slovak Opposition is criticising the project, however, claiming that the area of Cierna nad Tisou (Kosice region), with its rail terminal, which currently boasts that it's the "biggest harbour on land in Central Europe" due to all trains having to change gauges there, will lose hundreds of jobs.